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So once again futures started the session lower, and bounced overnight and are sitting at near session highs. We have had close to a 1% swing in S&P futures before most Americans have started their week (including me today).

I think this is another opportunity to shed some risk. I continue to believe that we are in the midst of a downward move and some favorite longs will be under pressure so remain negative. But I do think there is enough QE talk, hopes of central bank intervention, and the occasional bit of good corporate or economic news to trigger small relief rallies. So it isn’t time to be all in short, especially as I view 1,400 as strong support, and at 1,425 we have achieved much of the move.

Seeing some “analysts” who hadn’t take a close look at QE1 and QE2 and were eager to assume that QE3 would lead to a spectacular stock market rise, back off a little. I think they confused correlation with causation. We have given lots of reasons why a market could sell off during QE, and stick to those, but are aware that as time marches on, there will be increased pressure to put that new money to work. That time isn’t yet, but it is there.

Greek PSI bonds have been a long time favorite here. Rode it down, rode it back up. Not yet selling as I remain convinced that any new Greek plan requires some government write-downs. This current bounce though, on back of vague comments out of Germany, that likely don’t match any economic reality known to man or markets may be the right time to finally sell some.

The best part about being bearish here, is that you can be short the “liquid” instruments. It isn’t that often that it is easy to be short term bearish and find the liquid or hedge instruments attractive. Across the board the liquid instruments feel long and don’t feel priced against you.

In credit space, IG19, HYG, JNK, are all priced a little rich, but not that, “this is awesome, yields are going to zero” rich, but more of the “it has worked and what else can I do” rich.

So sell some risk and wait for the latest move to fade and find a better opportunity to buy risk.